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olga_2 [115]
3 years ago
13

You save $500 in a retirement account at age 25. it increases an average of 10% per year until you are 65. which formula and res

ult indicates how much money you will have in this account at age 65?
a.500 x (1 + 0.10) ^ (65 - 25) = $22,629.63b.500 x (1 + (0.10 x (65 - 25)) = $2,500 submit
Computers and Technology
1 answer:
Anvisha [2.4K]3 years ago
6 0
Any amount deposited in a bank at today will follow the compound interest formula for a period of time to multiply the amount of money deposited over time. Here too we can use the same formula: i.e

Amount after certain time = Principle * (1 + rate of interest/ number of installments in a year)^( number of installments in a year * time of deposit)

So, the correct formula for the amount at the age of 65 will be:

A = 500 * (1+0.1*/1)^(1*(65-25)) = 500 * (1+0.1/1)^(40*1) = <span>$22,629.63 </span>is the correct answer.
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